Unfortunately the earthquake and tsunami will cause the Yen to rise as the yen is brought back to Japan. This repatriation will help pay for the cost of rebuilding. Should also bring the US dollar lower.

Nikkei was already showing weakness before Mother Nature made herself known. How many companies on the index have been affected negatively by what has happened? Insurance companies yes, construction companies probably not so much.

Serious selling of copper last week with a solid close below SMA(13). After hour trading shows that copper is now below its weekly 3LB reversal price. The Nov 2010 low (3.635) should be the first level of support in case of a reversal.

"Muammar Qaddafi’s forces pushed insurgents out of the oil port of Brega, the fourth rebel-held town to fall as the U.S. and its allies grapple with measures that would halt the Libyan leader’s eastward advance."

...Not to worry. I have heard that we are "tightening the noose"....presumably against Qaddafi?

"Italy’s banking foundations, the biggest investors in the country’s lenders, may balk at providing more funds to the industry, an obstacle as banks seek to meet tougher capital requirements.

The foundations, including Fondazione Monte dei Paschi di Siena and Fondazione Cassamarca, spent at least 3 billion euros ($4.2 billion) to buy shares sold by Italian banks and had to forego dividends amid the financial crisis. As new rules are implemented, the lenders face a capital hole of as much as 17 billion euros, according to estimates by research institute Prometeia in Bologna. They may have to turn elsewhere for help.

“If the banks need capital they’ll have to make do,” said Dino De Poli, chairman of Fondazione Cassamarca, which owns 0.8 percent of Milan-based UniCredit SpA. Funds “are needed for the foundations and not for the banks, in which they’ve invested far too much already,” he said in a telephone interview."

Fuel rods at the quake-hit Fukushima No. 1 nuclear power plant's No. 2 reactor were fully exposed at one point after its cooling functions failed, the plant operator said Monday, indicating the critical situation of the reactor's core beginning to melt due to overheating.

The rods were exposed as a fire pump to pour seawater into the reactor to cool it down ran out of fuel, Tokyo Electric Power Co. said. The firm had reported the loss of cooling functions as an emergency to the government.

TEPCO said water levels later recovered to cover 30 centimeters in the lower parts of the fuel rods.

The seawater injection operation started at 4:34 p.m., but water levels in the No. 2 reactor have since fallen sharply with only one out of five fire pumps working. The other four were feared to have been damaged by a blast that occurred in the morning at the nearby No. 3 reactor.

The utility firm said a hydrogen explosion at the nearby No. 3 reactor that occurred Monday morning may have caused a glitch in the cooling system of the No. 2 reactor.

Similar cooling down efforts have been taken at the plant's No. 1 and No. 3 reactors and explosions occurred at both reactors in the process, blowing away the roofs and walls of the buildings that house the reactors.==============================

As you might imagine...I don't have a whole lot in common with the other moms in the 'hood. So, when the opportunity for interaction presents itself, my husband strongly encourages me to take advantage. Well, I'm stuck in a group of four ladies getting pedicures at 9 this morning, as soon as preschool drop off is finished. This was planned about 6 weeks ago, and there's no way I can backout without significant unpleasantness. The last time I did anything with this group was a brunch on a Friday at the end of January. When I turned around and discovered that CNBC was on mute on an overhead tv, saw that the dow was down 100 and Egypt was in revolt, I said my early goodbyes and ditched the brunch. So, I think I'm locked in to fancy toenails or I may never be invited to anything ever again (which would be okay, but not good for the kids, who still like to be invited to things.) Still trying to figure out how to set my stops. Best of luck to all this morning.

Commuters and residents of the Japanese capital faced confusion and uncertainty on Monday over the supply of food and energy after Friday’s devastating quake and tsunami which crippled a nuclear power plant.

Some store shelves were emptied and many train lines were shut down as Tokyo commuters returned to work after a weekend glued to horrific images of the extensive damage about 150 miles to the north.

In the largely residential Nerima district of Yokyo, staples like rice, bread and instant noodles were sold out. Lights were kept off on the produce shelves and meat refrigeration units to conserve electricity.

“About 40 to 50 people were lined up outside when we opened at 10. A day’s worth of food sold out in an hour. We had a second shipment delivered at midday and that sold out in an hour too,” said Toshiro Imai, a store manager in Tokyo.

“Part of the factory of one of our suppliers is damaged so stock is limited.”

What makes this a fundamentally unstable situation, in Roubini's, view is the power vacuum that has developed internationally since the fall of the Soviet Union and the end of the Cold War's bipolar model of controlled competition.

As Roubini says of the world now: "On all the most important issues there is now disagreement and disarray."

Roubini describes a world in which there are a multitude of emerging powers—and one in which he says the United States can't simply impose its will unilaterally to create a stable framework for rational competition

Denison Mines Corp. engages in the exploration, development, mining, and milling of uranium primarily in the United States and Canada. It also produces vanadium as a co-product from its mines located in Colorado and Utah; and recycles uranium-bearing waste materials, as well as gold. The company primarily holds interest in the White Mesa mill, an uranium mill with a vanadium co-product recovery circuit located in southeastern Utah near the Colorado Plateau District, the Henry Mountains Complex and the Arizona Strip; and the McClean Lake mill located in Saskatchewan. In addition, it holds interests in various development projects in Zambia and Mongolia. The company was formerly known as International Uranium Corporation. Denison Mines Corp. was founded in 1996 and is headquartered in Toronto, Canada.http://finviz.com/quote.ashx?t=DNN

"Helping to stabilize market conditions were a series of Bank of Japan injections of yen into the money market totaling a record 15 trillion yen. That would be equal to over $180 billion, which means Japan’s central bank has injected nearly a sum equal to the lion’s share of the Federal Reserve’s so-called QE2 to date–and the day isn’t over."

"...Deutsche Telekom Chief Financial Officer Timotheus Hoettges said in an email that the company is open to all options in the United States, where it has said it will need more wireless spectrum to support future data services..."

http://www.cnbc.com/id/41972745

and, the major stumbling block..

"...But such a deal would be very difficult as Sprint and T-Mobile USA use incompatible network technologies and Sprint depends on the spectrum of another venture, Clearwire Corp , for its high-speed wireless offerings. Sprint is a 54 percent owner of Clearwire, which has also been in talks with T-Mobile USA over a potential spectrum deal. Sprint and T-Mobile USA are expected to eventually move to a similar technology but Nomura analyst Michael McCormack said this is likely "many years from fruition." "One of the most important impediments to consummating a deal between Sprint and T-Mobile USA remains the significant technological differences between the two companies," said McCormack...."

What is the Difference Between GSM and CDMA?T-Mobile and at&t follow the GSM standard and Verizon and Sprint use the CDMA standard. Nextel uses a third standard developed by Motorola called iDEN. www.wisegeek.com/what-is-the-difference-between-gsm-and-cdma.htm

The iShares EWJ is prevalent, but I think people should be careful broadly buying Japanese equities for two reasons:1. This is the most important point I will make. Many Japanese conglomerates are part of these keiretsu value-destroying cross-shareholding groups. This has been a disaster for a long time with respect to shareholder rights and, more generally, good corporate governance. Even though most indexes are free-float adjusted, broad market Japanese ETFs will be dominated by these names.

2. Valuations are bonkers because they don't have the same kind of accounting standards as U.S. GAAP. You have to use scaling factors for many common ratios (and even then, it is inaccurate). The only way to bring the financials in an American context is if they cross list on an American exchange and offer a U.S. GAAP reconciliation.

These two reasons drive me away from the Japanese equity market, even if it means missing a lot of value

" . . .the human toll here . . .looks to be much worse than the economic toll, and we can be grateful for that, and the human toll is a tragedy, we know that. But these markets are, all these markets, right - stocks, commodities, oil, gold - there is no major breakout or breakdown."

I also think the odds of a nuclear catastrophe are very low. My understanding is that the many levels of containment make the most likely scenario a permanently ruined reactor. It is very unlikely that the public will be exposed to dangerous levels of radiation.

I suspect that almost all death deaths will be the unfortunate result of natural disaster.

In the 10 year yield, there is one trading range between 3.30% and 3.50% and another between 3.50% and 3.73%. We are now near the low point of the former range at 3.34%. We will be sellers of AGG today, has strong resistance at 106.

In the long bond, the range is 4.50 to 4.78%. We are close to the low point of the range at 4.53% and have opened a short position to hedge. TLT has resistance at 92.

We have owned LQD for some time. It has resistance at 109. We will be sellers of some LQD today.

The bottom line for us in general today is there are quite a lot of TEOTWAWKI trades on, and we don't believe there will be a meltdown in Japan, so we are looking to fade the apocalypse.

The reactor designs are very different from Chernobyl and there is every chance that a major meltdown can be averted, although these reactors are finished.

Selling of Japan is probably overdone although we bet it will continue for another day at least as there are certainly market players (insurance companies) who need liquidity.

We have been nibbling on divvys over the last few days. We like FTR in the US and PHI in Asia as 10% divvy plays that have been on sale. We also have our beloved NZT, although it has been albatross-like of late.

A breakdown below SPX 1275 would be important to us, until then it is party on or range trade in the US.

"...The Jos. Schlitz Brewing Company was among the first of the major brewers to use bigger cans, introducing the a half-quart can in 1956 and, four years later, putting the well-known original "Tall Boy" on the market, a 24-ounce can.

Other brands in the Schlitz family, including Old Milwaukee and Schlitz Malt Liquor, were given big cans of their own and all of them continued into the early 1980s, after Schlitz was acquired by Detroit-based Stroh Brewing Company.

Throughout its history, the Schlitz "Tall Boy" can maintained a simple shape -- Schlitz was also the first to use the "cone top" -- and the familiar white color with the Schlitz label -- a motif maintained in the modern incarnation.

"I think our drinkers will get a kick out of the can graphics that even include the original Tall Boy script," Wortham says.

Schlitz was actually ahead of its time when it came to using aluminum cans, becoming in 1961 the first major American brewer to manufacture its own cans.

"The company was really an innovator," says Leonard Jurgensen, a noted historian on the Schlitz Brewing Company. "Eventually, the other big brewers like Miller and Anheuser-Busch followed suit."..."http://onmilwaukee.com/bars/articles/schlitztallboys.html

Usually with falling knives there is the big dump (today) and the knife catchers are out, then there are the peep who wake up in the morning and see it's down, so then they sell, and the catchers get bloody. Some time around the end of the week might be safe.

Right now everyone is selling or holding off b/c of the nuclear plants. By tomorrow we will know more, but Japan still faces a lot of problems.

Price-wise anything in the 9s is a bargain already in terms of price to book, and 8s would be fill yer boots time. Very very solid chart support for EWJ between 9.25 and 9.50. If we get there, LB will be pulling the trigger.

it already did it's job as islands should completely erase the minor move that precedes them, however, they also frequently develop within larger patterns, in this case, the triangle that we broke down out of....

what's it matter?

gives evidence that this is still the C wave and that it's not over, bounce around 1267-1275 probably the best one worth trading for you ninja's.

I'm talking equity, seems to me people are still out buying the dips, SPY anyway, makes me think there would be some sort of "recognition point" before this correction is over and we head higher again.

Ben -- the vix is back below the 200 (by a penny.) I can see a downward channel forming on SPX hourly -- we're close to the bottom of the channel, its about 10 pts wide, so a trip back to 1299ish is still possible.

just would seem the 200 day on the VIX shuts the bears down, bears want to see a close above that level I would think.

decent short term trend line up here on the 1d S&P but bulls failed to close that gap this morning and I don't think they are strong enough though they are making an attempt again to break the 200 there as well.

have you tried to develop any kind of mechanical trading system using VWAP?

I'm working on something right now using a/d ratio and the absolute breadth index, putting $10k into an account and trying it out for a few months here, averaging holding period for each trade is about 3 days. We'll see how it goes.

andy.. oh, i do see that triangle now on the day.. perfect on the 60 min too. we are in the apex right now.. so we shall see! check.. the other metals vote for a down move, imo.. my slv charts look bearish, too.

Mole at evil speculator has a number of automated trading programs, all for the ES, but I have no idea what's in them. It would take me a decade of nothing but computers and the market to be able to develop something like that myself. I'll just stick to toenails and trendlines.

some of the systems an individual trader could follow are far easier than you'd expect.

remember the dow theory algo I sent you? It's been working good.

or here's another simple one:

take a one day a/d ratio and buying the DOW when the ratio crosses above 1.018 and selling it short when the ratio declined below 1.018.

From March 1932 - August 2000 this would have turned $100 into $888,717,056 (assuming no commissions, slippage or dividends)

there are issues with this one here such as turnover b/c the average holding period is only just over 3 days, but it still works now, many of the old breadth trading techniques no longer work since 2000 but this one still does.

Same system from April 2000- Feb 2005 with an adjusted $1/share commission and ten cents per share for slippage was +56.1% versus buy and hold of -18.4% over the period.

if we stay in fairly low volatility that's a basic system someone should be able to use with some success. I'm still running the tests but I think with a VIX above 35 and the numbers change, you start to get whipsawed.

Thanks, Ben. I'll have to think about that some more. Problem for me is time...I'm pretty maxed out right now. I find that any time I add something new to the repetoire, performance suffers for a while. I'll print that out and take it with me on the cruise...I'm sure the frou-frous won't hinder my comprehension any :-)

I love the heels, but I didn't know all the starters on that team. Everybody that was into hoops knew the Michigan guys though. I know this crowd isn't into basketball much but I bet even people here remember the Fab Five.

the only teams around that time that might have been more popular was when grandmama played for UNLV.

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This blog should not be interpreted as investment advice of any kind.The authors are NOT representing themselves CTAs or CFAs or Investment/Trading Advisor of any kind.The authors may or may not trade in the markets discussed.The authors may hold positions opposite of what may by inferred by this blog.The information contained in this blog is taken from sources the authors believes to be reliable, but it is not guaranteed by the authors as to the accuracy or completeness thereof and is presented here for information purposes only. Commodity trading involves risk and is not for everyone.

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"The Shawshank Redemption"

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This Blog's primary focus is on trading based upon technical analysis. It is run by "AmenRa" and "AndyT," quasi-anonymous traders who employ technical analysis to assess market conditions and trading opportunities. AmenRa utilizes 3LB techniques, Moving Averages and Fibonacci sequences. AndyT's analysis relies primarily on "Wave Theory" and Fibonacci sequences. The Comments Section is uncensored and open to the public. Please try and adhere to the "Blogger Policy."